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Alternative Property Investment Opportunities: What are Some Options?

December 18, 2019

Sometimes it pays to think different—or more specific—in real estate

If the 21st century has taught us anything, so far, it’s that the rules have changed. What was once considered inconceivable at the dawn of the millennium is now a reality. Livable, walkable downtown development is surging, shared workspaces and telecommuting are givens, and ridesharing, scooters, and on-demand food delivery are a smartphone swipe away.

It makes sense, then, that the traditional boundaries of commercial real estate are also expanding in new and alternative directions—or breaking down into smaller segments. Individual investors and REITs are no longer confined by the large multifamily, retail, office, or industrial boxes.

1. Niche housing

Investing in housing has long been a tried-and-true way to enter the real estate marketplace. In recent years, though, things have gotten a lot more personal, with owners and landlords eager to market properties to very specific tenants. There’s something for everyone.

  • Mobile homes have long catered to those who are unable to afford a down payment for a single-family home and some “luxury” mobile home parks have started to become more common. Mobile homes are also an opportunity for someone new to CRE investing or who doesn’t have a lot of capital. While profits may be smaller than those in higher-priced CRE properties, the affordability makes it possible for someone to develop property investment and ownership skills in an area with low competition.
  • On the opposite end of the housing spectrum is corporate housing. Very often, companies having to do regular business in locations away from the home office need mid- to long-term accommodations for employees. To keep costs down, they would rather avoid pricey hotels while providing employees with a home-away-from-home experience. While leases can be either short or long term, the goal is to make an attractive property financially attractive for the tenant.
  • With college enrollment continuing to climb even during slow economic periods, students are facing a housing crisis. On-campus dorms are crowded and run-down, while off-campus housing can be expensive—and this, in turn, has given birth to a larger student housing marketplace. Investors are purchasing multi-family properties close to college campuses and offering clean and affordable accommodations with shared social spaces. Anyone investing here should be prepared to manage first-time renters who lack references; their parents; and significant wear and tear on the property.
  • While Millennials are front and center in many of today’s discussions, Baby Boomers are the gift that keeps on giving. In this case, it’s through a seniors housing trend. The scope of that population spans those approaching retirement to significantly older individuals—and this translates into everything from active adult communities to assisted-living facilities to nursing homes.

2. Medical office buildings

In addition to seniors housing, an aging population—along with an increase in outpatient treatment—is also creating a strong demand for medical office buildings. Sweetening the prospects for investors is the idea that medical office tenants tend to be stable, long-term occupants and the need for patient care remains strong no matter the economic climate.

3. Self-storage

In recent months, there’s been the talk of a looming recession. Whether or not that economic downturn gets here is anyone’s guess, but it’s always wise to look at opportunities that have historically done well in lean years. Self-storage properties are often that investment. In good times and bad, people need to store stuff—and interest appears strong across economic classes and market locations.

4. Data centers

Demand for data grows each day, and there is no indication that will ever slow down. As a result, storage—the size of the cloud and the buildings that store the physical servers that support it—has to grow. That’s why data centers are predicted to be strong performers. While they can be considered a riskier investment because of the increase in competition and capital commitment, the business model has performed well even during slow times. 

Thinking outside of the box in SoFlo

When it comes to thinking outside of the CRE box, the professionals at Morris Southeast Group cannot think of a place that’s more creative than South Florida. Whether it’s converting a warehouse into an artist hub or developing a vacant lot into a state-of-the-art housing rental property, everything seems to be achievable here.

To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

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